July 08, 2008

A "Sunset" On Solar Power?

Hi everyone! Here's my post for the week! - Bri

The good news? Solar power companies are rushing at record speeds to complete the many business projects they have lined up for the remainder of 2008. The bad news? Their speediness is prompted by the fact that on December 31, the solar power tax credits that have been subsidizing the industry will expire.

Solar power has long been viewed as a potential alternative energy source to oil – and a renewable, environmentally-friendly one at that. Yet unlike the oil industry, which yields high monetary profits, the business of solar power is less lucrative and has therefore created less incentive for people to invest in it. In 2005, the federal government passed the Energy Policy Act, which promised 30% tax credits for systems “placed in service” between January 1, 2006 and December 31, 2008.

According to this article, a debate on how to fund the tax credits has prevented the eight-year extension of the subsidy. Smaller businesses will likely be hit hardest by the tax credit cutoff, but even large businesses will face challenges in staying financially afloat. Solar power installation companies of all shapes and sizes are cutting back on expenses, laying off employees and are turning their attentions abroad for future business.

Naturally, increasing solar power use will benefit nations and the environment regardless of whether the energy is harnessed in the United States or not, but the U.S. possesses so much potential for solar energy development that creating disincentives for investing domestically makes absolutely no sense. Many areas in the south and southwest, especially large desert states like Arizona, Nevada and New Mexico, receive immense amounts of sunlight each day, and as the American Independence Energy website explains, it would also be extremely easy to attach solar panels to the flat roofs of various homes and commercial buildings to catch the sun’s rays.

If the federal government fails to take further action to support solar power tax credits, individual states can take the lead and enact their own incentives to encourage solar energy usage. Even state counties and cities have begun tos how leadership in light of federal inaction. To see if your state or any othe municipality has created incentives for renewable energy and energy efficiency, visit http://www.dsireusa.org.

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